Supply Chain Startup: Crunching the inventory numbers so you don’t have to

I get a lot of emails. I mean a lot. Most end up in the trash folder. What caught my attention in the email from Divya Vaid at Fuse Inventory wasn’t so much her description of what the company does – “an inventory planning solution powering the next generation of commerce” – but something she wrote about the founders. “SaaS solutions are famously an industry dominated by men. However, Rachel [Liaw] along with our CTO & Co-Founder Bridget Vuong, haven’t let that stop them as they’ve closed $3 million in funding and pave the way for women in Tech.”

It’s true. I’ve been writing this blog for nearly four months now, and until my call with Liaw, Fuse Inventory’s CEO and co-founder, all of the supply chain startup founders I’ve spoken to have been guys.

I was further intrigued by their backgrounds. The pair new each other from their undergraduate work at Stanford, where they wrote software together. After school, Vuong earned a Master’s at Stanford and went on to work for Google, where she was “a full-stack developer on entrepreneurial projects such as Waze and Helpouts,” according to her bio. 

Liaw launched her career as a developer, working for a startup developing software for the legal industry. From there, she worked for a startup developing a fashion app for social media influencers. She began her supply chain career as an intern for KiwiCo, a company that makes arts and crafts products from children. “I had the chance to work on everything from procurement through planning to warehouse optimization and fulfillment,” she says. From there, she co-founded Parasol, a diaper and newborn baby products company that targets underserved parents. The company worked with contract manufacturers to redesign baby essentials from the ground up, products like diapers made without wood pulp – a novel manufacturing technique that removed the need for wood pulp that is in most diapers, formula and wipes.

She got a taste of inventory forecasting, planning and management, as well as the limitations of the available tools for small-to-mid-size companies. “At Parasol, I hired a team to build custom software because there was high end software to service big companies, but for a small company, it was Excel or boutique software,” she recalls. “Talking to inventory managers and planners across different verticals, I realized this was an industry-wide problem, and no one was claiming the space. I decided I wanted to build the software of my dreams if I was still a supply chain manager.”

Enter Vuong, who was ready for a new challenge. The pair began work on the Fuse Inventory platform in the summer of 2016; went live with a Beta version in 2017 and began selling product in 2018. Among their early customers is Glossier, a skin care company, and the shoe company Soludos. They raised nearly $3 million in a seed round in 2019, with Crosscut and Precursor Ventures participating.

The platform, which is a Cloud-based Software-as-a-Service model. At its core, it is a demand planning and forecasting engine, utilizing predictive analytics and algorithms. Fuse Inventory integrates with and pulls data from order management shopping carts like Shopify and Magento, 3PL systems, ERP and other supply chain systems to run its analysis. In addition to historical data and real-time demand, it can also consider unstructured data such as world events that might impact demand. “We’re very good at forecasting finished goods levels based on demand and then figuring out what you need to buy in raw materials and shared components,” Liaw says.

The solution allows a user to tag specific events in order to edit and refine the forecast. “Maybe you ran a promo last year that you hadn’t run in the past, or you’re not going to run again,” says Liaw. “We can take that out. Or, maybe an influencer tags you in Instagram, which might drive demand.” An upcoming release will include constraints optimization that can factor in events like the impact on the plan of a delayed shipment of materials.

The system does basic inventory management, with a centralized view of all of the inventory across a network, including distribution centers, stores, wholesalers, 3PLs and an Amazon warehouse. Last, and this is coming, the system will be able centralize all of the data its collecting across customers to get insights into the market that only an Amazon, Walmart or Target might get. “We want to get to a level where we can give Amazon-level data, and predict things like where you should be holding inventory to provide Amazon-like service,” Liaw says. “You can’t get there if your data is siloed.” Again, for now, that’s the vision Fuse Inventory is working on.

I asked Liaw if there were lessons learned from having founded or worked for other startups? “Being able to understand, recruit and retain the best talent is what makes any company,” she says. “You can’t skimp on your team. That’s the one place you can’t cut corners.”

SCMR’s Supply Chain Startup Blog is published every Friday. If you’re a startup, a venture capitalist or a supply chain practitioner working with startups, and want to share your story, or have startup news to share, email me at [email protected]. Remember that the purpose is not to promote any one firm – and a blog shouldn’t be interpreted as an endorsement of a firm or its technology. Rather it’s to start the dialogue between me, my readers and the people creating the NextGen Technologies that will power tomorrow’s supply chains.